Sector by sector: Is the global economy recovering?

The global economy: China's stimulus boosts tentative hopes that the end is in sight

Mixed signals: July 2009 Chinese government says it will meet 2009 growth target of 8%.September 2009 Dominique Strauss-Kahn, head of the IMF, says crisis has shifted from finance, to the wider economy, to a "third phase" of high unemployment.

After a nerve-shredding three months at the start of 2009, when international trade was plunging and a fresh wave of banks stood on the brink of collapse, the world economy has recently shown reassuring signs that the worst is over.

In China, where the government opted to spend some of its mountain of foreign exchange reserves on a massive stimulus package, the economy has bounced back more strongly than many observers expected, giving its trading partners a boost.

Germany and France have shown growth in the second quarter of 2009, marking the end of recession, though with unemployment still rising and wages depressed, there are fears that consumers may continue tightening their belts, bringing a "double-dip" downturn in 2010.

US stock markets have been roaring ahead, and there are tentative signs that the housing market has begun to stabilise. Figures released on Friday showed that the rate of job losses is slowing. However, that still meant 216,000 Americans lost their jobs in the month, and the unemployment rate is at a 26-year high of 9.7%.

Dominique Strauss-Kahn, managing director of the International Monetary Fund, warned as the G20 meeting opened on Friday of a "jobless recovery".

When the OECD released its latest forecasts last week, it said the end of the global recession would come sooner than it had thought, and predicted that every economy in the G7 would record some positive growth by the end of 2009 - except the UK.

Verdict: Jury is out

Manufacturing: Small signs of an upturn - but not in confidence

Mixed signals: July Employment in British manufacturing falls to lowest on record at 2.7m.June Manufacturing output enjoys biggest monthly rise since January 2008.

The mood among Britain's long-suffering manufacturers swung through three separate phases in 2009, according to Steve Radley, chief economist at the Engineering Employers Federation (EEF). "At the start of the year, things were horrid and it looked as though they would be horrid for ever; then there was a feeling that we could see things bottoming out, but now it's, 'We can see the odd order picking up, but we don't feel confident about it'."

There have been a few tentative signs of an upturn. In June, Honda re-started its production line in Swindon, bringing thousands of staff back to work after a three-month shutdown. And July's manufacturing PMI - a survey of managers' expectations for future business - ticked above the crucial 50-50 line that signals growth. So far, the optimism has not shown up in official figures, however. The latest snapshot shows output from Britain's factories is 11.8% lower than a year earlier.

After a decade or more of studied laissez-faire towards ailing industry, the government has begun intervening to support manufacturers, offering funds to Airbus and Rolls-Royce, among others, and negotiating with Nissan to bring the manufacture of a new electrically-powered car to Sunderland.

But even for those workers who have kept their jobs, times are hard: the EEF's latest survey of pay settlements in the sector showed that three quarters of firms had a pay freeze.

And Radley says the real worry is what happens when government support runs out.

Verdict: Jury is out

Housing: Gradual recovery in US lends hope to buyers

Mixed signals: July Nationwide predicts house prices will end the year higher than they began it.August Capital Economics consultancy predicts that house prices have another 20% to fall over the next couple of years.

This is where it all began - and where it will probably all end. In the US, which generated all those sub-prime mortgages, the housing market bubble burst in the autumn of 2006. It was only a matter of time before housing markets around the world sank too.

Fast-forward three years and there are growing signs that the US housing market is finally stabilising. This is important because, until house prices stop falling and home repossessions stop rising, banks cannot reset their battered balance sheets and resume more normal activity, a prerequisite for a more general recovery.

Sales of new homes in the US jumped 10% in July, which would appear to indicate that a revival is under way, but there is a huge overhang of unsold new-build properties and existing homes. As a result, few are expecting a meaningful upturn in prices, though most agree that the market has probably stopped falling.

In Britain, too, house prices appear to have bottomed out, and even to have risen a little in the summer. Nationwide reported last week that prices had risen 1.6% in August, the third consecutive monthly rise, and are now only 14% below their late-2007 peak. But given that prices here had risen even further than those in the US - and have not yet fallen as far - many experts are not convinced that a recovery is imminent, especially as prices at auction have started to soften again.

The banking system is still in a mess and mortgages remain expensive and hard to come by, despite record low base rates. Prices could fall further as unemployment continues its upward march. Estate agents say prices are being supported by a collapse in new building and a lack of property being offered for sale.

Verdict: Green shoot

Lending: While the credit crunch continues to hit firms, big bonuses make a comeback

Mixed signals: August Bank lending to British businesses falls in the first half of the yearAugust Barclays offers £30m to poach a group of five traders from JP Morgan

Banks and bankers have been at the centre of the credit crunch - not surprisingly, since it was their own excessive risk-taking that lay behind the sudden freezing of global credit markets on 9 August 2007.

They lent excessively to sub-prime borrowers in the United States in the years up to 2007 and then sliced and diced the resultant mortgage portfolios and sold these complex products to other banks around the world.

When it all turned sour, they immediately became consumed with mistrust and refused to buy anything from each other for fear of being landed with worthless assets. Those left holding the bulk of the sub-prime-related collateralised debt obligations stumbled, then fell.

In Britain, the highest-profile failure at the start of the crunch was Northern Rock, which had to be bailed out in September 2007. In the following 12 months Bear Stearns, Royal Bank of Scotland, Lloyds, Halifax, Lehman Brothers, Bradford and Bingley and Alliance and Leicester all either collapsed or had to be rescued by governments or other banks.

The banking system remains nearly paralysed, especially in Britain and America, with banks reluctant to lend either to businesses or to home buyers as they try to rebuild their capital bases.

Perversely, the few that emerged relatively unscathed from the financial crisis, or that simply benefited indirectly from taxpayer support for the wider banking system, are finding there is still money to be made in certain markets, but it can be divided among fewer players - meaning even more lovely profit.

So, while taxpayers face a decade or more of higher taxes to pay for the bank bailouts, and would struggle to get a mortgage, some bankers are already raking in big bonuses again.

The chancellor, Alistair Darling, and Mervyn King, the governor of the Bank of England, have expressed dismay at the drop in bank lending to businesses so far this year, and this remains the single biggest factor that could hold back a recovery.

There is growing anger in official circles that banks which are now state owned - RBS and Lloyds Banking Group - are not doing nearly enough to pull the economy out of recession.

Verdict: Brown root

Jobs: The threat of a 'lost generation' still looms

Mixed signals: July Economist David Blanchflower predicts that unemployment could rise by another million to 3.5 million over the next year.June Claimant-count measure of joblessness rises by the smallest amount for a year.

This is the human damage done by the credit crunch and related recession. Unemployment is rising in every major economy. Dole queues are likely to carry on lengthening into next year. The young are the worst affected as struggling firms slash recruitment.

In Britain, the jobless total has surged by about 750,000 over the past year to just under 2.5 million. That's the highest level for 14 years and gives a jobless rate of 7.8%.

Experts say the tally could easily rise to 3.5 million over the next year or 18 months, even though rises in the narrow, claimant-count measure have slowed sharply. But with about half of the rise being among the under-25s, there is a risk that the country will have a "lost generation" of young people who will struggle to get regular work for the rest of their lives. Such are the scarring effects of unemployment on the nation's young.

The US has also suffered a huge rise in unemployment over the past couple of years and has seen its jobless rate rise to nearly 10%. There are early indications, however, that things may be starting to stabilise. Employment fell by 250,000 across the country last month, the first drop in the jobless rate since April 2008.

Across the eurozone, unemployment has risen to its highest for a decade at 9.5% and is set to get worse. About 3.4 million people have lost their jobs in the past year or so. Germany, though, has not seen as big a rise in unemployment, with its jobless total falling slightly last month.

Analysts attribute this to temporary government subsidies for companies that put employees on short-time working rather than making them redundant. After Germany's federal elections next month, the figure is expected to shoot up.

Mixed signals: August Bank of England governor Mervyn King warns that recovery could be "slow and protracted".August Chancellor Alistair Darling says he is confident that the UK will see growth at the turn of the year.

The UK is set to move out of recession and start growing again by the end of the year. Yet in spite of apparent signs that the economy has bottomed out, the Bank of England is continuing to pump vast sums of money into the economy with its policy of "quantitative easing".

King warned recently that any signs of an upturn were only "short-term" and that a full recovery was likely to be "long and protracted". He is worried by the overhang of personal debt that people are holding, the problems in the banking system and the enormous government deficit.

King is aware of the dangers of withdrawing stimulus before the recovery has fully taken hold. That was what the US central bank did in the the 1930s, prolonging and deepening the Depression. So King and his US counterpart, Federal Reserve chief Ben Bernanke, are keen to avoid the same mistake.

King's message is that just because economic output has stopped collapsing, a strong recovery cannot be taken for granted. Doomsayers, most of whom failed to see the recession coming, warn that the Bank risks stoking inflation in the longer term, but King thinks the risks of doing too little to boost the economy outweigh those of doing too much.

I was so busy that I really appreciated Speaker's Corner arranging and leading the pre-event briefing calls with all speakers. It allowed me and the speaker to help shape their sessions. Great service.
Infor PLC